A federal judge on Tuesday said JPMorgan Chase & Co must face a class action lawsuit by investors who claimed the largest U.S. bank misled them about the safety of $10bn of mortgage-backed securities it sold before the financial crisis.
Reuters reports that U.S. District Judge Paul Oetken in Manhattan certified a class action as to JPMorgan's liability but not as to damages, saying it was unclear how investors could value the certificates they bought, given how the market was 'not particularly liquid.' He said the plaintiffs could try again to certify a class on damages.
Oetken ruled 10 months after JPMorgan reached a $13bn settlement to resolve U.S. and state probes into the New York-based bank's sale of mortgage securities.
The class consists of investors before March 23, 2009 in certificates issued from nine of 11 trusts created by JPMorgan for the April 2007 offering. The other two trusts attracted only a handful of investors, and are the subject of other lawsuits.
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